Unions welcome Govt moves on A4e – but call for further tendering inquiries

Public sector unions are calling for further investigations into a wide range of employment and training work given to the under-fire agency, A4e, after the Department of work and Pensions (DWP) terminated a contract because it would be “too great a risk” to continue.

It comes as the spending watchdog, the National Audit Office, says the DWP missed opportunities to detect potential problems at A4e.

Amyas Morse, head of the National Audit Office, said: “The Department’s past assessment of the risk of fraud at A4e missed vital evidence.

“This included evidence of nine possible cases of fraud and seven of improper practice by A4e’s staff and highlighted a possible systematic failure to mitigate the risk of fraudulent and irregular activity at both an office and regional level.”

Responding to yesterday’s decision to terminate one of A4e’s contracts, the University and College Union (UCU) says it is particularly concerned that A4e remains the preferred bidder for two £15m prison education schemes in London and the east of England.

A4e has been in the public spotlight since its former chairman, Emma Harrison, resigned as Prime Minister David Cameron’s ‘families champion’ in February, amid allegations of fraud.

Employment Minister Chris Grayling announced on Tuesday that the company’s Mandatory Work Activity contract to help up to 1,000 jobless people in the South East find work was being ended.

The DWP has been auditing its commercial relationships with A4e after receiving an allegation against the company earlier this year.

A total of eight people have been arrested in connection with a police inquiry.

Chris Grayling said: “While the team found no evidence of fraud, it identified significant weaknesses in A4e’s internal controls on the contract.”

UCU said A4e’s prison education contracts needed to be urgently looked at, including its status as preferred bidder in a tender for the two Skills Funding Agency prison training contracts.

Last March, the further education minister stated in a letter to the union that ‘should events indicate that A4e is not an appropriate provider, the [Skills Funding] Agency will refrain from contracting with them’.

UCU general secretary, Sally Hunt, said: “A4e cannot remain the preferred bidder for multi-million pound prison education contracts following such a damning verdict from the government.

“If ministers believe it is too risky to work with A4e then we clearly need a fully transparent retendering process.

“Surely the significant weaknesses in A4e’s internal controls and the fact that ministers said today they are too risky to work with makes them an inappropriate provider.”

Preferred bidders for similar prison education contracts across England, tutoring inmates in maths and English, have so far all been FE colleges.

The Skills Funding Agency says it expects to finalise the contracts by early summer.

A4e is to keep other contracts it has with the DWP, including those under the Work Programme, which tackles long-term unemployment.

However, the Commons Public Accounts Committee called yesterday for “the Department to urgently publish the results of its own investigation.”

Committee chair, Margaret Hodge MP said: “The Department must assure itself and us that no improper payment is made to contractors before the effective monitoring systems are in place.

“It is important that this data shows clearly the performance of individual contractors.”

PCS general secretary Mark Serwotka said: “The decision to strip A4e of this contract is welcome, but people will rightly wonder how this company is managing to hold on to other government work, raking in tens of millions of pounds of public money.

“The pursuit of private profit should never be prioritised over public service, but until these contracts are ended, and the vital support given to people who are out work is brought back into the Department for Work and Pensions, we will not rid our welfare system of these scandals.”

Critics say a wider concern is that contractors to the Work Programme – which was introduced by the Coalition in June 2011 – are receiving at least £400 just to assess each candidate, also that payments for people who did not need the programme amount to nearly £1bn and could be even higher.

The cost has been estimated at the equivalent of £40 for every household in Britain.